In Cape Girardeau, Missouri, income tax is imposed on most sources of income that a person receives in a certain year. Under federal, state, and most local laws income from all sources may be taxed. The federal government has the constitutional authority to tax income thanks to the 16th Amendment, which was enacted in 1916. Before that time, the U.S. Supreme Court had consistently declared the federal income tax unconstitutional, but individual states, including Missouri were allowed to impose an income tax if they saw fit.
Everyone in the United States must pay the federal income tax. However, you only have to pay the state income tax of the state in which you reside. You should speak with an accountant or tax lawyer in Cape Girardeau, Missouri if you aren't clear about what system your state has.
Income Tax Deductions in Cape Girardeau, Missouri
A tax deduction is simply a reduction in the part of a person's income that is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,000.
Don't confuse a tax deduction with a tax credit. A tax credit simply lowers your tax bill by the amount of the credit. A tax credit normally reduces your tax bill more than a reduction of the same amount.
Many common expenses in Cape Girardeau can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable contributions, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Cape Girardeau, Missouri Tax Attorney Help?
Income tax laws can get very complex. If you are in Cape Girardeau, Missouri and have any questions about your taxes, you should consult with an accountant or local tax lawyer to avoid tax problems, such as audit or wage garnishment.